Local Governments on Rampage Against Banks’ Manipulation of Credit Markets

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“When both government and the citizens start acting together, things are likely to change in a big way. There appears to be a unity of interests — the investors who thought they were buying bonds from a REMIC pool, the homeowners who thought they were buying a properly verified and underwritten loan from a pretender lender, and the local governments who were tricked into believing that their loans were viable and trustworthy based upon the gold standard of rate indexes. In many cases, the only reason for the municipal loan, was the illusion of growing demographics requiring greater infrastructure, instead of repairing the existing the infrastructure. As a result, the cities ended up with loans on unneeded products just like homeowners ended up with loans on houses that were always worth far less than the appraisal used.” — Neil F Garfield, www.livinglies.me

Editors Note: Hundreds of government agencies and local governments are on the rampage realizing that they were duped by Wall Street into buying into defective loan products. This puts them in the same class as homeowners who bought such loan products, investors who believed they were buying Mortgage Bonds to fund the loans, and dozens of other institutions who relied upon the lies told by the banks who were having a merry old time creating “trading profits” that were the direct result of stealing money and homes, and misleading the financial world on the status of the interest rates in the financial world. All loans tied to Libor (London Interbank Offered Rate), which was the gold standard,  are now in question as to whether the reset on those loans was true, correct or simply faked.

The repercussions of this will grow as the realization hits the victims of this gigantic fraud broadens into a general inquiry about most of the major practices in use — especially those in which claims of securitization were offered. It is now obvious that the deal proposed to pension funds and other investors was simply ignored by the banks who used the money to create faked trading profits, removing from the pool of investments money intended for funding loans that were properly originated and dutifully underwritten.

Cities, Counties, Homeowners and Investors are all victims of being tricked into loans that were simply unsustainable and were being manipulated to the advantage of the banks they trusted to act responsibly and who instead acted reprehensibly.

The ramifications for the mortgage and foreclosure markets could not be larger. If the banks were lying about the basics of the rate and the terms then what else did they do? As the Governor or of the Bank of England said, the business model of the banks appears to have been “lie More” rather than living up to the trust reposed in them by those who dealt with them as “customers.” Specifically, the evidence suggests that while the funding of the loan and the closing documents were coincidentally related in time, they specifically excluded any reference to each other, which means that the financial transaction as it actually occurred is undocumented and the document trail refers to financial transactions that did not involve money exchanging hands.

The natural conclusion created by the coincidence of the funding and the documents was to conclude that the two were related. But the actual instructions and wire transfers tell another story. This debunks the myth of securitization and more particularly the mortgage lien. How can the mortgage apply to a transaction described in the note that never took place and where the terms of the loan were different than what was expected by the creditors (investors, like pension and other managed funds) in the mortgage bond. The parties are different too. The wires funding the transaction are devoid of any reference to the supposed lender in the closing documents presented to borrowers. Thus you have different parties and different terms — one in the money trail, which was undocumented, and the other in the document trail which refers to transactions in which no money exchanged hands.

When the municipalities like Baltimore start digging they are going to find that manipulation of Libor was only one of several issues about which the Banks lied.

Rate Scandal Stirs Scramble for Damages

BY NATHANIEL POPPER

As unemployment climbed and tax revenue fell, the city of Baltimore laid off employees and cut services in the midst of the financial crisis. Its leaders now say the city’s troubles were aggravated by bankers’ manipulation of a key interest rate linked to hundreds of millions of dollars the city had borrowed.

Baltimore has been leading a battle in Manhattan federal court against the banks that determine the interest rate, the London interbank offered rate, or Libor, which serves as a benchmark for global borrowing and stands at the center of the latest banking scandal. Now cities, states and municipal agencies nationwide, including Massachusetts, Nassau County on Long Island, and California’s public pension system, are looking at whether they suffered similar losses and are weighing legal action.

Dozens of lawsuits filed by municipalities, pension funds and hedge funds have been consolidated into a few related cases against more than a dozen banks that are involved in setting Libor each day, including Bank of America, JPMorgan Chase, Deutsche Bank and Barclays. Last month, Barclays admitted to regulators that it tried to manipulate Libor before and during the financial crisis in 2008, and paid $450 million to settle the charges. It said other banks were doing the same, but none of them have been accused of wrongdoing. Libor, a measure of how much banks must pay to borrow money from one another in the short term, is set through a daily poll of the banks.

The rate influences what consumers, businesses and investors pay on a wide range of financial contracts, as varied as mortgages and interest rate swaps. Barclays has said it and other banks understated the rate during the financial crisis to make themselves look healthier to the public, rather than to make more money from clients. As regulators and lawmakers in Washington and Europe assess the depth of the Libor abuse and the failure to address it, economists and analysts are already predicting it could be one of the most expensive scandals to hit Wall Street since the financial crisis.

Governments and other investors may face many hurdles in proving damages. But Darrell Duffie, a professor of finance at Stanford, said he expected that their lawsuits alone could lead to the banks’ paying out tens of billions of dollars, echoing numbers from a recent report by analysts at Nomura Equity Research.

American municipalities have been among the first to claim losses from the supposed rate-rigging, because many of them borrow money through investment vehicles that directly derive their value from Libor. Peter Shapiro, who advises Baltimore and other cities on their use of these investments, said that “about 75 percent of major cities have contracts linked to this.”

If the banks submitted artificially low Libor rates during the financial crisis in 2008, as Barclays has admitted, it would have led cities and states to receive smaller payments from financial contracts they had entered with their banks, Mr. Shapiro said.

“Unambiguously, state and local government agencies lost money because of the manipulation of Libor,” said Mr. Shapiro, who is managing director of the Swap Financial Group and is not involved in any of the lawsuits. “The number is likely to be very, very big.”

The banks have declined to comment on the lawsuits, but their lawyers have asked for the cases to be dismissed in court filings, pointing to the many unusual factors that influenced Libor during the crisis.

The efforts to calculate potential losses are complicated by the fact that Libor is used to determine the cost of thousands of financial products around the globe each day. If Libor was artificially pushed down on a particular day, it would help people involved in some types of contracts and hurt people involved in others.

Securities lawyers say the lawsuits will not be easy to win because the investors will first have to prove that the banks successfully pushed down Libor for an extended period during the crisis, and then will have to demonstrate that it was down on the day when the bank calculated particular payments. In addition, investors may have to prove that the specific bank from which they were receiving their payment was involved in the manipulation. Before it even reaches the point of proving such subtleties, however, the banks could be compelled to settle the cases.

One of the major complaints was filed by several traders and hedge funds that entered into futures contracts that are traded through the Chicago Mercantile Exchange and that pay out based on Libor. These contracts were a popular way to protect against spikes in interest rates, but they would not have paid off as expected if Libor had been artificially lowered.

A 2010 study cited in the suit — conducted by professors at the University of California, Los Angeles and the University of Minnesota — indicated that Libor was significantly lower than it should have been throughout 2008 and was particularly skewed around the bankruptcy of Lehman Brothers.

A separate complaint filed in 2010 by the investment firm Charles Schwab asserts that some of its mutual funds, including popular ones like the Schwab Total Bond Market Fund, lost money on similar investments.

The complaints being voiced by municipalities are mostly related to their use of a popular financial contract known as an interest rate swap. States and cities generally enter into these swaps with specific banks so that they can borrow money in the bond market. They pay bondholders based on a floating interest rate — like an adjustable-rate mortgage — but end up paying their bankers a fixed rate through a swap. If Libor is artificially lowered, the municipality is stuck paying the same fixed rate, but it receives a smaller variable payment from its bank.

Even before the current controversy, some municipal activists have said that banks took advantage of the financial inexperience of municipal officials to sell them billions of dollars of interest rate swaps. Experts in municipal finance say that because of the particular way that cities and states borrow money, they are especially liable to lose out on their swaps if Libor drops.

Mr. Shapiro, who helps cities, states and companies negotiate these contracts, said that if a city had interest rate swaps on bonds worth $1 billion and Libor was artificially pushed down by 0.30 percent, which is what the lawsuits contend, that city would have lost $3 million a year. The lawsuit claims the manipulation occurred over three years. Barclays’ settlement with regulators did not specify how much the banks’ actions may have moved Libor.

In Nassau County, the comptroller, George Maragos, said in a statement that according to his own calculations, Libor manipulation may have cost the county $13 million on swaps related to $600 million of outstanding bonds.

A Massachusetts state official who spoke on the condition of anonymity because of potential future legal actions, said the state was calculating its potential losses.

“We are deeply concerned and we are carefully analyzing all of our options,” the official said.

Anne Simpson, a portfolio manager at the California Public Employees’ Retirement System — the nation’s largest pension fund — said that the fund’s officials “are sifting through the impact, but there certainly is an impact.”

In Baltimore, the city had Libor-based interest rate swaps on about $550 million of bonds, according to the city’s financial report from 2008, the central year discussed in the lawsuit. The city’s lawyers have declined to specify what they think Baltimore’s losses were.

The city solicitor, George Nilson, said that the rate manipulation claims meant that the city lost out on money when it needed it the most.

“The injury we suffered during the time we suffered it hurt more because we were challenged budgetarily,” Mr. Nilson said. “Every dollar we lost due to illegal conduct was a dollar we couldn’t pay to keep open recreation centers or to pay police officers.”


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39 Responses

  1. […] Like this: Like Be the first to like this. Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor,Investor, Mortgage, securities fraud Tagged: | money trail, pretender lender, waiver of subrogation, wire transfer instructions « Local Governments Weigh Eminent Domain to Stop ForeclosuresLocal Governments on Rampage Against Banks’ Manipulation of Credit Markets » […]

  2. ok, ukg.

  3. Titanic Banks Hit LIBOR Iceberg: Will Lawsuits Sink the Ship?
    Friday, 20 July 2012 09:48
    By Ellen Brown, Truthout | News Analysis

    “At one time, calling the large multinational banks a “cartel” branded you as a conspiracy theorist. Today, the banking giants are being called that and worse, not just in the major media but in court documents intended to prove the allegations as facts”

    http://truth-out.org/news/item/10442-titanic-banks-hit-libor-iceberg-will-lawsuits-sink-the-ship

  4. thanks, carie. I know you’re a team player. Please don’t take my jabs personally. I love everybody here.

  5. That’s awesome, usedkarguy.

  6. david, I have felt no more joy than I did today, when I coached someone engaging a BK practitioner. Like most homeowners, she waited until she has a sheriff’s sale pending to ask for help. But now she is moving with confidence. A little knowledge goes a long way.

  7. Shelley, I love ya baby, I really do; please, take a nap. You gotta need the rest.You’re up every hour of the day! It’s “A Bugs’ Life”, and please don’t worry so much. best wishes…

  8. I mistakenly called it the Ant video. It has been a very long time since I have been able to watch movies with my grandchildren.

  9. I mistakenly referred to this animated movie at least twice, it is called It a Bugs World. http://www.washingtonsblog.com/2012/07/6-minute-pixar-video-how-the-99-finally-see-end-1s-obvious-crimes.html This movie makes a hughe statement.

  10. @ USED

    I was ready to stop—wondering why the hell am i doing this–then KC made it worthwhile—-

  11. @SAE

    Goodness—what they are referring to are called the Milankovitch Cycles that drive the shape of earths orbit around the sun—we are currently at a cyclical peak –actually an overlay of at least three well-known peaks—leading to increased absorption of solar insolation by the oceans—warming of the water—which causes the release of disolved gases because the hotter water is the less gas it can sustain in solution——-popular terminolgy is global warming—im not sure if the mayan calendar represents a coincidence or if they somehow could calc the changes inpattern–it took poor milankovitch 30 years to draw rhe equations on one cycle——supercomputers do it today

    no aliens required–it happens every 120,000 years—–we are in a population boom today because earth is friendlier when its warm no matter what the natural gas guys say

    not much connection to bankers–except some like it hot

  12. we gone!!!!!!!!!!!!!
    David, there is no moderation: this is free speech, baby! forget about making a point around here. too much interference. and yes, the bankers are laughing at us……for now. some of these people should spend less time typing and more time learning about their case or their local appellate process or FRCP or bankruptcy law or state mortgage rules or lien avoidance in chapter 13 or ……something.

  13. @ SAE–well you have one more option open now–a good insanity defense. Its not an insult its an observation—the fact that you cant see its nuts is proof of your problem–I understand that the objective of foreclosure attys is to cause psychological collapse—and id say you are proof of it—add extreme emotional distress to your claims and attach the string as evidence

  14. You are good at insulting people. I have an open mind and dont believe in insulting people. like to know my options.

  15. @AUTHOR;

    IS THIS A JOKE? My God is there a way i can block this nutcase—this is worse than all of the petty BS that has flooded this thread–petty but human-and a little humorous —but this is just plain nuts—–no wonder the govt and banks feel they can get away with anything.—

    Is Mork gonna be on board with some Klingons too—-my favorite martian—–lady you have officially cracked–are you setting up some sort of insanity defense?

    beyond that im speachless

  16. You may want to investigate the galactcfed@yahoo.com. Celestrial beings claim to be coming to earth to save us from the disaster/distroyer Planet Nibiru, coming our way. Justice may be around the corner.It has been prophecied for earth to end in 2012. They claim the coast will be flooded due to the magnetic pull of Nibiru, being five plus times the size of earth. The worst of the damage is exspected to happen by September 26, 2012. And Nibiru is exspected to be out of the area by December 21, 2012. And not back for 3600 years. They claim they are waiting in the stars to come to our rescue and seem to know a lot about the cabal events happening here. The humans and celestrial humans ( state they prefer not to be called aleins,are in space ships/ ET’s, on this site claim they are involve in the arrest and resignation of the cabal/banksters list we have been watching on this site.I have been listening and monitoring their web site. Seems sensible to me that if they were going to contact us it would be by the web. They dont sound like looneys, they make sense. Nibiru is definately out there and has been spotted by many humans and scientist. Sheppard has pictures of Nibiru on fox news about last September. The human eye has seen this planet now. It is called the destroyer planet also. Sure hope this does not happen, but in just in case, it would not hurt to be prepared and to monitor this web site. Dont really know how you can be prepared but to go underground and get away from all coastal areas. Nibiru is suppose to carry debrie and pounding particals to earth and heat. I am praying this does not happen, but I am fearing this could be true. The myan calendar and several of our anchestor tribes claim this happened 3600 years ago. There is proof there are cities buried off the coast of a lot of continents like Atlantis for at least sixty miles full length of many coast. The day of reckoning may be here.

  17. We have no authority to guess what God intends, as He works in mysterious ways. In all your ways, acknowlege Him and He shall direct your paths. We know the worship of money is the root of all evil, and those who bring suffering upon us over money will stand before Him and be judged for it. If we perish in His name at the hands of the Moneychangers, with their intricately planned evil, carried out over the course of centuries, we’ve fulfilled our fate as His servants. Revelation says that some of us will die because we refuse the mark of the beast. One third of the trees will be burned up and the oceans will be no more. We’ve a ways to go. Live righteously and live forever. Bankers and money worshipers will get what they deserve directly from our Creator without our intervention, so it truly doesn’t matter if they prevail in the flesh. No flesh shall inherit the Kingdom, for the flesh is corrupt. Do not despair because of the lack of justice. See around it.

  18. What what Pratt says on this video.
    http://stopforeclosurefraud.com/2012/03/15/video-oral-arguments-washington-supreme-court-bain-v-bain-v-mortgage-electronic-registration-sys-et-al-and-selkowitz-v-litton-loan-servicing-lp-et-al/
    In my thoughts I see Pratt testifing to over a million cases of fraud and intent to do so to move over a million clouded titles and steal property,including homeowner equity loss and I am sure causing homeless families and some suicides.

  19. This scandal is a continuance of the crimes since the days of Ceasar, however these criminals attempted to do this in the days of the S&L crisis. The savings and loans crisis was somewhat crushed, by over 800 banksters going to jail, and you can bet a bunch got away with it. Then the big clincher, the banks invented MERS in 1995 or 1996 to skirt aroung the fraud. See the video of the Bains V MERS with Melissa Huelsman at the WA Supreme Court case, where the MERS attorney Pratt, states and boast MERS was put together in I believe 1996 to move and I quote “UNMOVEABLE LOANS”, then Pratt brags MERS enabled over a million unmoveable loans to be foreclosed on. Those people lost their houses back then to these criminals. the titles were clouded or they would not have been unmoveable. which MEANs to me MERS was invented to commit crime and conceal the truth, the clouded titles and for no other reason. MERS was invented by the banks. The banksters worked hard to deregulate the protective laws in a quest to steal our property and used every move to set us up to steal our property and the wealth of the investors and all Americans for the cabal, the mafia. This did not happen in 2005 or 2007 or 2009, it came to the surface and woke us up during those years, by the loss of millions of homes and the American wealth. My mouth dropped to the floor when I heard Pratt state MERS was solely invented to move unmovable loans in 1996. Did this just fly over the heads of everyone?

  20. yes, dcb, and I’m still wondering where it all went. Oh, and we – I think I can speak for at least some others – want it the hell back, WHATever it takes! Attach under RICO, something. Grow some first. You know.

  21. ShareThe Lying Bankers Scandal should be called the Bailout Theater scandal. I don’t mean the perhaps decades-long part where traders manipulated LIBOR by 0.01% or so, up and down, for personal profit. I mean the part that started in 2007 when the bankers lied by much more so they’d look healthier than they in fact were. That part is bailout theater because Friday’s data dump by the New York Fed proves the Fed and other “regulators” knew what was

    Got my numbers off a decimal point –only one basis point times say conservatively 200 trillion for 5 yrs—–lets see thats equal to .01% or .0001 X 5 X 200 trillion or one quadrillion—now were talking real money——so a quadrillion is [pls check me folks–workin without a calc here] 1,000,000,000,000, 000—big number—-so i knock off 4 decimals? to come up with THE number –is it possible? start with 15 zeros take away 4 an you get $ 100,000,000,000 —a mere 100 billion–roughly banker bonuses over the same time—when i look at it like that it just seems so much less significant–except i dont buy the 1 basis pt–not for an instant—-everybody is just squeezing this down to keep the numbers realistic in OUR simple minds–but didnt we all sort of wonder where all those billionaires came from?

  22. I believe in a higher power and their will be a day of reckoning and a day of repenting.

  23. “fear of a reckoning day of any kind.”

    Right on, jg. Fear of jail and fear of God are actually good things…hey, we ALL die—and you can’t take this material crap with you…only the good things you’ve done you take with you—and if you haven’t done any—well…yikes.

  24. David, excellent commentary! I will continue to believe that all that is happening to me and my family right now is by the Right hand of God. Not just me, but the little band of us fighting this battle are the ones that see it as “Good” versus “Evil”. What these bankers have done to people is indeed evil. The battle must be fought. And won.
    My attorney spoke of the return of the White Buffalo (born in Wisconsin) that signifies the return of the spirits of good to triumph over evil. The fact that we have been bound together spiritually is something I think most of us would admit to. Thanks again.

  25. @JG
    Re belief in higher power:
    With times come change in what that higher power desires by some belief systems. The “botherhood of man” etc carried forth and espoused by missionaries from these shores to the dark and ugly places of the world was imposed unwillingly upon those poor denizons. Thus across the undeveloped world the missions were not taken to heart–instead a deep sense of distrust and dislike was imbued in those hearts in the darkness. And a desire to avenge the humuliations and arrogances of the western missionaries and the expoitive commerce that they carried with them. So in the 18th, 19th and 20th centuries the culture of the english 1st and foremost was thrust upon them.

    Can you condemn the 50 odd wallstreeters who called the Indian subcontinent home for returning the favor? What Commandments do they purport to embrace but survival of their own? They do not break faith—those of ours who expect otherwise are blind to the reality of the world and the disdain in which most hold our culture –our beliefs. and doubtless they would say if asked –albeit they never are—that we are only too willing to set aside our Commandments if it be only the non-believers who suffer for it.

    In like manner the English have repeatedly laid waste to the sandy fields of the middle east and north africa—extending the commandments to those peoples also. The English foretold a century and more of strife there by pitting one race against another in artificial societies held together by blood and tyrants. Is it a surprise that the potentates that have evolved hold us and our beliefs in contempt–desiring only our gold and our women. Look not there for pity —no quarter to be granted to us by them. No guilt at our poor treatment in those hearts.

    Indeed the Book that they hold high implores them to rid the earth completely of infidels–at least the male ones.

    Similarly the oldest Book distinguishes between the pagans and the children of the highest. The Commandments were laid down to govern conduct by the children of god in dealing with one another—no extension was made to apply those rules to dealings with the whole of humanity–for those people were realsis and knew from experience that no tender mercies would be afforded them at the hands of the barbarian pagans.

    I would posit upon these historic facts that these several peoples have not abridged their belief systems. The error lies with us–our naive and unfounded expectation that our beliefs have been widely accepted and others give our creed recognition. This is our mistake –not theirs. The worlf is what it is –not what we would wish it to be. That is the great mistake of globalism–what that doictrine calls for is a dropping of the ancient beliefs we have long held and replacement with an as yet undetermined moral compass—but long ago this was determined as “survival of the fittest” aka “to the victor belongs the spoils”. We now see this daily.

  26. Whether or not one believes in a higher power, this is what happens, at least to some, when there is no fear of a reckoning day of any kind.

  27. sorry—meant demands a CONSCIENCE.

  28. I believe the entire system WILL collapse…but we need a new one with actual morals and high standards, with truthfulness at it’s foundation…which of course demands a conscious, and prosecution of lawbreakers.

  29. I used to have hope. That was years ago. One gets jaded as the calendar pages fall and the years go by and the criminality just continues full bore. Neil Garfield was calling out these crimes long in advance of anyone else. I hung to his every word seeing the fraud for what it is, peeling back the layers one at a time. I was determined to learn enough to be able to mount a formidable defense/offense at the criminality.

    But years went by and Neil’s words were and still are proven true. But to what end? I, like many here, had clung to the belief that when the truth became visible, the strings to the massive fraud machine would begin unraveling, and the entire edifice would come tumbling down as soon as sanity prevailed. But the opposite has occurred.

    The results have proven to me that there’s no hope for mankind, without the entire system collapsing. The sign-off of the criminality by our states highest law enforcement authorities and the judiciary have proven to me on a local level that there’s no attainable goal that makes continuing this battle worthwhile. And believe me, I’ve worked long and hard with my AG, long enough to know that they’ve 100% thrown in with the criminality, at least to the point of looking the other way. They simply will not prosecute, or even discuss it. Period. Too Big To Litigate Against wins again.

    Add Holder and Breuer to the mix on the federal level and it’s a done deal. I’m surprised those two haven’t ordained foreclosure defense as a serious criminal act, worthy of being tossed into the banker’s for-profit prison systems providing yet another backdoor bailout by squeezing the borrower dry.

    I believe enough is enough, and that it’s high time for the implosion. Uncle. Bring it on. I only hope that every single person who has had a hand in these crimes against humanity is prosecuted eventually. Tribunals are in our future, after we pick up the pieces. And if not, multi-generational debt peonage all around. Used to be one would be classified a tin foil hatter when saying these things. But it’s here. Now.

  30. I agree Carey. Allowing the cities to do imminent domain is to support the continued crime and ignore the crime against the homeowners.

  31. So sad…even Dylan Ratigan has the wind out of his sails…his show was cancelled and he basically said on his last show that he was naive to think he could make a difference in a world where everything is rigged against us—and massive fraud rules…

  32. Great summation DCB. We’re all left looking like deer in the halogens coming from every compass point.

    As to the foreclosure side of the equation, BAC was down 5% today. I, for one, would like to see this rabid dog buried.

    If a homeowner is running short of funds, it’s a done deal….no money for motions means no litigation. If the bank is insolvent, they get taxpayer funds to continue the fraud. It ain’t right. It’s a problem when all of the Complaint Departments have been bought and paid for.

  33. Dcbreidenbach:

    Some rampage. Huh?

    It will be another 5 minute wonder. Then as you said, move on….

  34. @ALL

    Whe I Go back to the days when I sat across the table from investment bankers while i represented real companies doing real business –and of course we knew that they were greedy crooks on the other side of the table–that the rule of caveat emptor applied in spades. We had a team of finance and tax lawyers and finance specialists–as did they—- we did not speak among ourselves when we were left alone in their conference room because well it was most certainly bugged—-

    Our documents generated from weeks of negotiations did not rival the complexity of the securitization crap that every poor homeowner in effect has incorporated by reference in his note—-who wouldv thought that you would have to open up a 1000 page set of documents to see if you can get a 60 day extension on a payment while you are lying in the hospital —answer being –of course not–please default and well make it all better.

    This is a system that should not be allowed to reach the homeowner–its inherently unfair–it cannot be fixed —CFPB is whistling in the wind if they think that they can reform this beast. There must be a return to older models–cut the predators from the system–it should not be a threat that they do not lend to homeowners–it should be a protection.
    Today, the judiciary legislature and regulators by default impose a caveat emptor standard bereft of a fair dealing covenant upon homeownswer facing the same or worse types that we in large corporations wouldnt trust out of our sight.

    Is it a surprise to me that they got caught rigging FOREX against their pension trust customers on derivatives—certainly not—rather I would have expected it. The surprise is that the pension reps’attorneys did not???

    Is it a surprise that they rigged LIBOR to add a few basis points on every transaction —–yes—-because they couldnt get away with it forever–so basically they just decided they did not care.The perfect crime is the one where even if caught red-handed–you get away with it. They did. Is it a deterrrance to these guys that they might have to take early retirement and open up a new hedge fund? Hardly. Is it a deterrance that the bank itself has to pay a civil fee of $500 million—its tax deductible , possibly in 2 jurisdictions, unless the closing specified otherwise—and if it did not so specifiy then the only way to read it is “tacit approval” What was the after tax cost?

    The driver here is that the spread that iv seen mentioned is about 10 basis points—-0.1% —seemingly small—-but multiplied by many trillions is huge——hundreds of billlions—so large in fact that its too big to repay. So the too big to fail aspect becomes the foundation for this –the banks know by experience that the bigger the theft–the deception–the more likely they get away with it. Toss a couple guys under the bus——have a little fuss in the middle east and its water over the dam. Remember when the entire world was focusing on LLoyd Blankfein’s tstimony about how he triggered the financial collapse? Day after day–until the BP blowout–then the news left Goldman and never went back.= Not even now. Not even though in the meantime–Goldman and Morgan Stabley and Chase have begun to control the priices you pay for gasoline as well as credit–hopefully they will not be as stingy with gasoline as with credit–but they can if they want.

    The little point spread on a trillion dollars over 5 years can be calculated as the Net Present Value of the difference—and skimmed right off the front as enhanced fees. That is what drove them—–they would argue to the regulators that this is simply another way to improve their capitaixation. Sure the regulators knew it–seemingly the UK folks encouraged it —–the foundation problem is TBTF and lack of prison for active perps.

    The reason I am posting on these issues is that I am simply overwhelmed by the extent of the frauds being revealed—literally a new one every day–and as these new ones unfold they take the spotlight off the old ones that are capturing more and more homeowners every day–now homeowner mortgage fraud is simply old hat–suck it up–move on.

  35. Justice is Slow … But we are getting there. They have been bilking us all from every angle and We Get It! It was no mistake .. it was greed!

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